Canada launches venture capital plan to mobilize $5.5 billion for growth investment

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Canada venture capital plan

Highlights

The Canadian government will provide $1 billion in cash through the Growth VCCI program starting in 2026-2027, split across three investment streams.
The $700 million Fund-of-Funds stream aims to leverage at least an additional $2.1 billion from private capital investors, with current calls for expressions of interest due January 21, 2027.
Investments from the Growth VCCI initiative are projected to attract and leverage at least $3.8 billion in private capital, resulting in total investment over $5.5 billion in Canada's venture capital and growth ecosystem.

Funding structure and application timeline

As reported by Government of Canada, citing the Government of Canada, the new Venture and Growth Capital Catalyst Initiative, or Growth VCCI, will provide $1 billion on a cash basis starting in 2026-2027 to support venture and growth capital investment across the country.

The program is split into three streams: a $700 million Fund-of-Funds stream intended to leverage private venture capital and attract pension funds and other institutional investors, a $200 million Life Sciences stream for Canadian venture capital fund managers backing domestic life sciences companies, and a $100 million Emerging Manager stream for newer Canadian fund managers, including those focused on strategic sectors and regions outside traditional venture capital hubs.

Minister Mélanie Joly also said the call for expressions of interest for the Fund-of-Funds stream is now open. Innovation, Science and Economic Development Canada is seeking applications from qualified fund-of-funds managers, including private capital fund managers, pension funds and other investors, with submissions due by noon PCT on January 21, 2027.

Private capital impact and economic goals

Ottawa says the funding is expected to leverage at least an additional $2.1 billion from private capital investors through the Fund-of-Funds stream, with features including risk sharing, broader exposure to performance and the ability to invest at scale across Canada's technology and innovation ecosystem.

More broadly, the government says investments under the new plan and Growth VCCI are anticipated to attract and leverage at least $3.8 billion in private capital, for a combined investment of more than $5.5 billion in Canada's venture capital and growth ecosystem. Selected fund managers are expected to help deepen the country's venture capital market, unlock institutional money and support long-term economic growth.

In our earlier article on private capital sector consolidation, we described how fundraising pressure and slower exits are pushing managers to build larger, multi-strategy platforms through acquisitions. We also highlighted EQT’s planned purchase of U.S. real estate firm Stockbridge following its Coller Capital deal, as the firm expands assets under management and positions new flagship funds for the current market cycle.

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